Buffing the Image Of the Chief Executive
August 29 2004 by Chief Executive
IN the wake of the corporate governance scandals of the last several years, chief executives must make changes to rebuild their stature as leaders, says Andrea Redmond, co-leader of the C.E.O. and board services practice at Russell Reynolds Associates, an executive recruitment firm. Following are excerpts from a conversation with Ms. Redmond, who is also a co-author of a new book, “Business Evolves, Leadership Endures” (Easton Studio Press):
Q. Would you agree that the corporate governance scandals of the last few years have tarnished the image of chief executives as trustworthy leaders?
A. Yes, I would. I think a lot of people in the corporate world are surprised by the staying power of this level of dissatisfaction at what is perceived as a lack of integrity.
Q. Disgraced chief executives are all over the news, but the corporate leaders with whom I speak don’t seem to be concerned about that. They think it’s ancient history.
A. I wouldn’t agree with that. They take it very seriously and are very concerned and disturbed by the public’s perception of fraud and deception and greed.
Q. So how can chief executives recover? Is it best to start inside their companies?
A. That’s a good place to start. When trust falls apart, employees also lose their enthusiasm for and commitment to the organization. That affects customers and product quality. It’s a pretty big deal.
The answer is going back to basics. All sorts of management theories and leadership theories come and go and ebb and flow, but at the end of the day there are some important traits that seem to make all the difference in the world.
Q. What traits define strong leaders today?
A. Employees want a chief executive and a leader who has backbone, who will tell the truth, who will make the tough decisions, who will deliver the bad news, who will be honest with them. They want a chief executive who will walk the talk.
People watch what people do, not just listen to what they say. I’m reminded of a company where I was doing the C.E.O. search. They were talking about the lack of trust in the previous C.E.O. I asked a lot of people to give me examples. One of the best examples came from someone who said, “Well, he always said that ‘there are no assigned parking spaces in the parking lot. That mentality doesn’t exist. This is a meritocracy.’ But everybody knew they couldn’t park in that one closest spot. That was his spot.”
Q. Who has done a good job of re-establishing trust in his or her leadership?
A. The one name that comes to mind is someone I was involved in recruiting, Jamie Dimon, at Bank One. He went into a troubled situation. But he’s a pretty straight-talking person. He’s got a lot of backbone. He tells you the way it is, the way he sees it. You might not like it. It might be bad news. But he’ll tell you the truth.
Q. All the polls show that corporate leaders rank fairly low in the public perception. What can they do to regain public trust?
A. Lasting trust is built on universal values and leadership traits. It can’t be invented or borrowed; it’s earned and built. Some of the obvious things are having a long-term focus, transparency, thinking about the messages that executive compensation sends and thinking about the notion that if you’re a rich person, you have to enrich the lives of others. They need to change the context of chief executive compensation.
Q. So compensation is such a big factor that it leads the public to question the leadership qualities of chief executives?
A. No, I don’t think it’s one of the major factors, but it is a factor that has gotten a lot of press. Unfortunately, what has gotten a lot of press are those individuals who have received a high amount of compensation when shareholders and employees have suffered and the company has performed poorly. When there is a disconnect like that, it becomes a lightning rod.
Q. What else can chief executives do to restore their images?
A. Of all the traits we’ve identified as being important, on the one hand we have heart and the other hand we have backbone. Those traits are not mutually exclusive. To build trust, people around you need to know that you have a heart and that you care about them winning as much as you care about you winning. Chief executives need to be able to display that heart while also having backbone. The tricky thing is how can you teach these traits. It’s hard to teach someone how to have a heart.
Q. Do you think chief executives should be more visible in giving speeches and supporting nonprofits? Does that matter?
A. Having heart isn’t giving speeches and being involved in not-for-profits. Having a heart means being aware of what it’s like to stand in somebody else’s shoes instead of being so insulated.
Q. You think chief executives are insulated?
A. For any leader, it’s tough not to get insulated. It can be tough to get straight information and to get people to tell you the truth.
Q. The balancing act must be tough.
A. The chief executive’s job today is harder than it’s ever been, and I’ve been doing executive search for 18 years. When I talk to somebody about going in and taking that chair, I want to know that they really, really know what they’re getting into and really want to do it, because it’s really hard. Nobody wants an insular chief executive any more. They want a chief executive who can give them vision, who can listen. They want a chief executive who gives them straight talk, who has heart and who has a high emotional I.Q.